The popularity of tea is worldwide, but nowhere in the world does tea contribute as much to the cultural milieu as in Japan. There the preparation and drinking of tea has acquired esthetic significance and has developed into a distinct artistic accomplishment.

Tea was originally brought to Japan in the 9th century, by the Buddhist monk Eichū (永忠), who had returned to Japan from China. This is the first documented evidence of tea in Japan. The entry in the Nihon Kōki states that Eichū personally prepared and served sencha (unground Japanese green tea) to Emperor Saga who was on an excursion in Karasaki (in present ShigaPrefecture) in the year 815. By imperial order in the year 816, tea plantations began to be cultivated in the Kinki region of Japan. However, the interest in tea in Japan faded after this.

In China, tea had already been known, according to legend, for more than a thousand years. The form of tea popular in China in the era when Eichū went for studies was "cake tea" (団茶 dancha)—tea compressed into a nugget in the same manner as Pu-erh. This then would be ground in a mortar, and the resulting ground tea decocted together with various other herbs and/or flavorings.

The custom of drinking tea, first for medicinal, and then largely also for pleasurable reasons, was already widespread throughout China. In the early 9th century, Chinese author Lu Yu wrote The Classic of Tea, a treatise on tea focusing on its cultivation and preparation. Lu Yu's life had been heavily influenced by Buddhism, particularly the Zen–Chán school.[citation needed] His ideas would have a strong influence in the development of the Japanese tea ceremony.

Around the end of the 12th century, the style of tea preparation called "tencha" (点茶), in which matcha was placed in a bowl, hot water poured into the bowl, and the tea and hot water whipped together, was introduced by Eisai, another Japanese monk returning from China. He also brought tea seeds back with him, which eventually produced tea that was of the most superb quality in all of Japan.

This powdered green tea was first used in religious rituals in Buddhist monasteries. By the 13th century, when the Kamakura Shogunate ruled the nation and the samurai warrior class ruled supreme, tea and the luxuries associated with it became a kind of status symbol among the warrior class, and there arose tea-tasting (闘茶 tōcha) parties wherein contestants could win extravagant prizes for guessing the best quality tea—that grown in Kyoto, deriving from the seeds that Eisai brought from China.

The next major period in Japanese history was the Muromachi Period, pointing to the rise of Kitayama Culture (北山文化 Kitayama bunka), centered around the elegant cultural world of Ashikaga Yoshimitsu and his villa in the northern hills of Kyoto, and later during this period, the rise of Higashiyama Culture, centered around the cultural world of Ashikaga Yoshimasa and his retirement villa in the eastern hills of Kyoto. This period saw the budding of what is generally regarded as Japanese traditional culture as we know it today.

Tea ceremony developed as a "transformative practice", and began to evolve its own aesthetic, in particular that of wabi. Wabi, meaning quiet or sober refinement, or subdued taste, "is characterized by humility, restraint, simplicity, naturalism, profundity, imperfection, and asymmetry [emphasizing] simple, unadorned objects and architectural space, and [celebrating] the mellow beauty that time and care impart to materials." Murata Jukō is known in chanoyu history as the early developer of this, and therefore is generally counted as the founder of the Japanese "way of tea". He studied Zen under the monk Ikkyū, who revitalized Zen in the 15th century, and this is considered to have influenced his concept of chanoyu.

By the 16th century, tea drinking had spread to all levels of society in Japan. Sen no Rikyu, perhaps the most well-known—and still revered—historical figure in tea ceremony, followed his master, Takeno Jōō's, concept of ichi-go ichi-e, a philosophy that each meeting should be treasured, for it can never be reproduced. His teachings perfected many newly developed forms in Japanese architecture and gardens, fine and applied arts, and the full development of chadō, "the "way of tea". The principles he set forward—harmony (和 wa), respect (敬 kei), purity (清 sei), and tranquility (寂 jaku)—are still central to tea ceremony.

Many schools of Japanese tea ceremony have evolved through the long history of chadō and are active today.